In PS Connect, you should be able to to see a menu on the left hand side that says parent reach, this is where the option to manage groups is. Click on group manager in this menu to access groups.
Once in groups, scroll down to this sub option and enter the name of the new group and click GO
You will be taken to a new menu and be asked to choose the members of the group. The children's names represent the parent contacts. All the names are collected into form groups. Tick the names you need or if you need to choose a whole group, click the add all button at the bottom of the expanded form member list.
Once you have added all the students who need to be added, click GO at the bottom of the screen to finalise the additions to the group